​Gold Price Drop Of 13 Percent In Last Two Trading Days​​

By: | 04/16/2013 10:44 AM ET

Gold had its biggest one-day price drop since 1983, after a selling frenzy that began last week picked up speed, plunging $140.30 to $1,361.10 an ounce, a decline of 9 percent.

Gold Price Drop

The metal has dropped $200 an ounce, or nearly 13 percent, in the last two trading days. It’s the lowest price since February 2011.

George Gero, precious metals strategist at RBC Capital Markets, said the possibility of European central banks selling gold was especially worrisome since there were fewer nations interested in keeping gold reserves these days.

“There aren’t many other countries that want to buy,” Gero said. “In the past you saw Mexico, Russia, China, Turkey and other central banks buying gold, but right now there seems to be more of a need for dollars.”

Gold has been declining from a recent high of $1,792 on Oct. 4 as the outlook for the U.S. economy improved, diminishing the metal’s appeal as a safe haven investment. Since then it’s down $431, or 24 percent.

Some Federal Reserve officials have also been calling for an early end to the central bank’s bond-buying program. If that happens, it would likely cause U.S. interest rates to rise, resulting in a stronger U.S. dollar. That would give traders another reason to sell gold, since they see the metal as an alternative to holding dollars.

Silver fell even more than gold, by 11 percent. Silver lost $2.97 to $23.361 an ounce, its lowest price since October 2010.

Industrial metals also fell after China reported that economic growth slowed unexpectedly in the first three months of the year. The world’s second-largest economy grew by 7.7 percent over a year earlier, slowing from the previous quarter, and short of many private-sector forecasts that growth would accelerate slightly to 8 percent.

Copper, which tends to follow the outlook for global growth, dropped 7.7 cents, or 2.3 percent, to $3.27 a pound.